city agreements OK to maintain and redevelop Bridge Apartments | Local News
An unexpected solution to maintaining affordable housing in Missoula emerged from a city committee meeting on Wednesday.
The city originally bought the Bridge Apartments on West Broadway for $2.1 million in 2021 in hopes of finding a private partner to preserve the building’s 20 affordable rental units.
However, the costs associated with the 1990s installation prevented any potential buyers from coming forward to purchase the property.
“The unpredictability of deferred maintenance management costs coupled with capped revenues that are necessary to protect this project for affordable housing has created too big a hurdle for many affordable housing developers to navigate,” Eran explained. Pehan, Director of Community Planning, Development and Innovation for the city.
Instead of selling the property to a developer, the city elected to enter into a property management agreement and development agreement with BlueLine Property Management, LLC. BlueLine is currently building The Villagio and Trinity Apartments projects in Missoula, in addition to managing three affordable rental units in the area.
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Under the agreements, the city will continue to own the Bridge Apartments for the next five years while BlueLine manages the property and evaluates its redevelopment potential.
This plan “differs from what we originally envisioned,” Pehan said. But it does provide options to preserve the income-eligible rental units that currently exist on the site.
“We are very grateful to BlueLine for the creativity they presented to us in this proposal,” she said.
Under the agreements, which the City Committee authorized Mayor John Engen to sign on Wednesday, BlueLine will be responsible for renting and presenting units in the Bridge Apartments for the next five years. BlueLine will receive a property management fee equal to 10% of rents and gross receipts from tenants.
In the meantime, as owner, the city will be responsible for capital expenditures, emergency repairs and other costs associated with the project. Funds for these expenses will come from rent.
“We are working to replenish an operational reserve through monthly rents,” Pehan said. “Our hope would be that we would not see any major system failures that would exceed the operational reserves that we are able to build up from this monthly rental revenue.”
Part of the agreements with BlueLine include exploring redevelopment options, either in the form of maintenance of current units or total renovation with expansion of additional units.
The tenants of the building will receive relocation allowances in the event of redevelopment, giving them the possibility of being temporarily or permanently relocated in units where their rent would remain the same as in the Bridge Apartments.
The development agreement with BlueLine can also be extended if the developer applies for and receives low-income housing tax credits for the project within the five-year window.
The Missoula Housing, Redevelopment and Community Programs Committee was extremely pleased with the turn of events that led to the agreements presented Wednesday.
The committee voted unanimously to send the agreements to the mayor for signing, with only Ward 3 council member Daniel Carlino absent.
“I think it’s a great opportunity,” said Ward 4 council member Amber Sherrill. “Anytime we can save money and create affordable housing, I’m happy to advocate for it.”
“I know it’s not quite what was intended when purchased,” acknowledged Ward 1 Council Member Heidi West. maintain these units as affordable units in Missoula.”